Security Firm Denies Allegations Of Widespread Software Piracy

Stuart McClure, president and chief technology officer of information security software, services, and training firm Foundstone Inc., denies accusations that surfaced earlier this week in a Fortune magazine article that the company engaged in deliberate and widespread software piracy.

While McClure says his company fell short of full software license compliance, software piracy was neither rampant nor condoned, he says. "We are not perfect. We've made mistakes in the past. We didn't have 100% compliance," he says. "We didn't have everything perfect and buttoned-up, but we are striving for that the best that we can."

McClure says Foundstone hired an external firm, VLSystems, in April to conduct an independent audit on software-license compliance several weeks before the company received a letter from the Software & Information Industry Association in May regarding potential copyright-infringement charges.

McClure says Foundstone is in talks with the SIIA and attempting to resolve any areas where the company may be out of software-licensing compliance. He admits there may have been a couple of incidents of software-copyright infringement, but that the software audit conducted by VLSystems on May 2 concluded that 95% of the company's software is compliant.

"The independent audit on software-license compliance was conducted by VLSystems in April, long before any contact from the SIIA, which occurred in May," says McClure. "Even if you were to look prior to April, we were 78% to 83% compliant."

As for allegations that CEO George Kurtz was aware of software piracy and that he sent an E-mail in April asking employees to delete unlicensed apps, McClure couldn't be any more clear: "That is absolutely 100% false. It couldn't be further from the truth ... we can get sworn statements to that effect."

The Software & Information Industry Association declined to comment, but says it will be prepared to speak publicly on the matter late next week.

"I challenge you to find another company that's 95% compliant," McClure says. "Software licensing is one of the most difficult things to manage and maintain on an ongoing basis."